Skyscrapers 'linked with impending financial crashes'

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Matt Damon

Matt Damon

Player Valuation: £60m
http://www.bbc.co.uk/news/business-16494013

BBC News said:
There is an "unhealthy correlation" between the building of skyscrapers and subsequent financial crashes, according to Barclays Capital.

Examples include the Empire State building, built as the Great Depression was under way, and the current world's tallest, the Burj Khalifa, built just before Dubai almost went bust.

China is currently the biggest builder of skyscrapers, the bank said.

India also has 14 skyscrapers under construction.

"Often the world's tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction," Barclays Capital analysts said.

The bank noted that the world's first skyscraper, the Equitable Life building in New York, was completed in 1873 and coincided with a five-year recession. It was demolished in 1912.

Other examples include Chicago's Willis Tower (which was formerly known as the Sears Tower) in 1974, just as there was an oil shock and the US dollar's peg to gold was abandoned.

And Malaysia's Petronas Towers in 1997, which coincided with the Asian financial crisis.

The findings might be a concern for Londoners, who are currently seeing the construction of what will be Western Europe's tallest building, the Shard.

That will be 1,017ft (310m) tall on completion.


China bubble?

The 27-storey home of one Indian family in Mumbai
Investors should be most concerned about China, which is currently building 53% of all the tall buildings in the world, the bank said.

A lending boom following the global financial crisis in 2008 pushed prices higher in the world's second largest economy.

In a separate report, JPMorgan Chase said that the Chinese property market could drop by as much as 20% in value in the country's major cities within the next 12 to 18 months.

In India, billionaire Mukesh Ambani built his own skyscraper in Mumbai - a 27-storey residence believed to be the world's most expensive home.

Local newspapers said the house required 600 members of staff to maintain it. Reports suggest the residence is worth more than $1bn (£630m).

"Today India has only two of the world's 276 skyscrapers over 240m in height, yet over the next five years it intends to complete 14 new skyscrapers," according to Barclays Capital.

Barclays Capital's Skyscraper Index has been published every year since 1999.
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What is the moral of the story then lids?
 

Do they match star signs like the pyramids allegedly do? If so were the Egyptians into banking in a big way too?
 

That if you don't read the BBC website someone will always post links here as if nobody else in the world visits there?
 
Frank Drebin said:
There's hardly any skyscrapers in skelmersdale and it's a complete toilet.
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Skem banked itself reputation not on the silly "skyscraper" boom of the '60's and '70' but the less well known roundabout boom of the same time,it really was like the VHS vBetamax wars of the late '70's.

Time will tell if Skem got it right though.
 
linglong said:
Skem banked itself reputation not on the silly "skyscraper" boom of the '60's and '70' but the less well known roundabout boom of the same time,it really was like the VHS vBetamax wars of the late '70's.

Time will tell if Skem got it right though.
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Don't worry they've made some big share investments. If their predictions are correct, minidisc sales should hit an all time high somewhere in 2016.
 


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